Former construction boss Lino Zambito testifies before the Charbonneau inquiry probing corruption and collusion in Quebec's construction industry in this image made off television Monday, October 1, 2012 in Montreal. (Paul Chiasson/THE CANADIAN PRESS)

Former construction boss Lino Zambito testifies before the Charbonneau inquiry probing corruption and collusion in Quebec's construction industry in this image made off television Monday, October 1, 2012 in Montreal.(Paul Chiasson/THE CANADIAN PRESS)

Shockwaves from the Quebec corruption inquiry that has brought disgrace on the City of Montreal have rippled all the way into the office of Prime Minister Stephen Harper.

A man who was backed by the Prime Minister’s Office to head the Port of Montreal pocketed $300,000 in kickbacks on a local construction project in his previous job as Montreal city manager, according to testimony by a former construction boss who has admitted his own corrupt acts at the inquiry.

Lino Zambito, then head of now-defunct construction company Infrabec, testified Tuesday that in 2005, engineers contracted by the city forced him to use sewer pipes supplied by a company named Tremca, which was favoured by then city manager Robert Abdallah, who would receive the $300,000 extra the pipes would cost.

Mr. Zambito said he was assured the city would cough up extra money to cover the cost.

“In my head it was clear that there was an arrangement between Mr. Abdallah and Tremca and I had no choice but to buy pipes from Tremca if I wanted the contract,” said Mr. Zambito, who has admitted to rigging bids, paying bribes to city officials and kickbacks to the mob.

“At our dinner [the engineers] were clear. If I wanted the project from the City of Montreal, I had to install these pipes at the demand of Robert Abdallah.”

Mr. Abdallah vehemently denied the allegations, which so far hang on Mr. Zambito’s testimony. He described them as hearsay from a man he’s never met. “All I can tell you is that it’s completely false,” Mr. Abdallah told Montreal’s La Presse newspaper on Tuesday.

Mr. Abdallah left city hall in 2006. His name rose again to prominence last year when a Globe and Mail investigation found that in 2007 Mr. Harper’s then-spokesman, Dimitri Soudas and Senator Leo Housakos had suggested Mr. Abdallah to lead the Port of Montreal.

Tape recordings emerged that captured businessman Bernard Poulin and Tony Accurso, another construction magnate embroiled in allegations surrounding Montreal’s system of bid-rigging, planning to solicit help from the two Conservatives to promote Mr. Abdallah’s candidacy. Another candidate was eventually chosen.

Both the PMO and Mr. Soudas, who now works for the Canadian Olympic Committee, declined to comment. In Parliament, Conservatives avoided directly answering questions about why Mr. Abdallah was touted for the job. “The president of the Port of Montreal is named by its board of directors. The board of directors did not name Mr. Abdallah,” said Pierre Poilievre, the Conservative parliamentary secretary to the Transport Minister.

Mr. Abdallah soon found work in 2008 running a construction company named Gastier, which was then linked to one of Mr. Accurso’s companies. Mr. Abdallah left Gastier in 2011, according to company officials.

In his testimony Tuesday, Mr. Zambito walked through the 70 contracts he received from the city in the mid-2000s. Nearly all of them were rigged, he said.

Mr. Zambito peppered his testimony with the names of City of Montreal officials and engineers who he said rigged bids and received kickbacks and funnelled money to the Mafia and to Union Montréal, the political party of Mayor Gérald Tremblay.

Late Tuesday, the city announced three city officials have been suspended pending investigations. François Thériault and Michel Paquette of the city’s infrastructure department were accused by Mr. Zambito of facilitating extra billing for fake costs. Yves Themens, another infrastructure bureaucrat, leaked lists of bidders that were supposed to be confidential, according to Mr. Zambito, who said he played golf with Mr. Themens but never paid him directly.

Several other city officials named by Mr. Zambito have already resigned or retired.

Mr. Tremblay’s city hall opponents have demanded he quit, calls that echoed over the city’s airwaves and in the newspaper opinion pages Tuesday. Mr. Tremblay has so far refused, saying he has investigated all allegations and turned over any evidence of wrongdoing to police. His conscience is clear, he said.

A tight circle of construction companies were part of a mob-sanctioned club that fixed prices and sent kickbacks to mobsters and Union Montréeal, the political party of Mr. Tremblay, Mr. Zambito has testified.

Mr. Zambito said Frank Zampino, the former head of Montreal’s executive committee and the right hand man of Mr. Tremblay, once intervened to ensure an one of Mr. Accurso’s firms would win a $16-million contract. Mr. Zampino and Mr. Accurso are facing criminal charges on other matters. Both denied wrongdoing Tuesday.

Mr. Zambito hinted that provincial political financing will be next on his list of targets. Once he’s finished his testimony on Montreal contracts, he will walk through 15 or 20 contracts he won with the Quebec Transport Ministry.

The former construction boss said while Transport officials had little to do with rigging provincial bids, engineering firms hired to run projects and political parties “were another realm.”

He also said other cities like Laval had no mob influence, but equally corrupt systems for doling out contracts.

“In Montreal, a lot has been made about the role of organized crime, but I can say that in some areas the role of organized crime was played by elected politicians,” Mr. Zambito said.